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Short Sale is the new buzz
word being used by savvy real
estate Buyers who are looking
for a hot deal in the current
Buyer’s market. You have seen
them….properties advertised with
a price that seems too good be
true, and considerably lower
than comparable properties even
in the same neighborhood. Are
Short Sales really a good
deal, and how do you go about
purchasing one of these
properties? It is not always as
simple as you are led to
believe, but with the proper
tools, you can purchase a
quality
Short Sale property well
below market value.
What is a Short Sale?
A
short sale means the
seller's lender is accepting
less than the mortgage balance
to release an existing mortgage.
Just because a property is
listed with
short sale terms does not
mean the lender will accept your
offer, even if the seller
accepts it. Lender acceptance
may depend on several elements
of your offer as well such as
the percentage of your down
payment, closing date, other
negotiated terms, and possibly
whether or not you are
pre-approved for a mortgage.
As a general rule, the seller
will need to be in default on
their mortgage and must have
stopped making mortgage
payments, before a lender will
consider a short sale.
Always Hire a Realtor That Has
Experience With Short Sales
A
Realtor experienced with
Short Sales can help you find
properties that are being sold
as Short Sales. Often these
properties are only advertised
as Short Sales to the
Realtor
community through
the
Multiple Listing Service,
and are not readily available to
the general public.
If you are a Seller who finds
yourself in a possible
Short Sale situation, it is
absolutely essential that you
utilize the services of a
Realtor who is experienced
in Short Sales.
Regardless of if you are buying
or selling a
Short Sale property, a
Realtor with experience in short
sales will help to expedite your
transaction and protect your
interests. You don't want to
miss any important detail due to
inexperience or find out your
transaction is not going to
close on time because no one has
followed up in a timely manner.
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Find a Realtor with Short Sale
Experience Here
You can't just decide you're
going to sell your home at a
loss by asking your lender for a
short sale, and expect them to
readily agree. Lenders will
more than likely not consider a
short sale if your payments
are current.
Sellers need
to provide a hardship letter to
the lender. Sellers may also owe
taxes on the amount of debt that
is forgiven.
Submitting Your Offer to The
Lender
After the seller has accepted
your offer, your
Realtor will send it to the
lender for approval. Keep in
mind that, even though the
Seller has accepted the offer,
the contract is not valid until
it is accepted by the Lender.
The lender will review the offer
in detail and will schedule a
Broker’s Price Opinion (BPO)
which is a sort of abbreviated
appraisal, comparing this
property with other comparable
properties that have recently
sold or are currently for sale.
Timing Is Everything
A very important notion to keep
in mind is that the
Short Sale process takes a
considerable amount of time.
Depending on the details of the
situation, a Short Sale will
typically take much longer than
a traditional sale, because of
all the added steps involved in
the process. Be patient, and
let your Realtor make sure all
the important details are taken
care of.
Foreclosure vs. Short Sale
Most
mortgage experts agree that
sellers will take a bigger hit
on their credit score by going
through foreclosure versus a
short sale. The effect on
credit will show up as a
pre-foreclosure in redemption
status, which will result in a
loss of 80 to100 points on the
FICO score versus 250 – 280
points with a foreclosure.
If you're a
seller trying to decide
whether to let a home go through
foreclosure versus attempting a
short sale, salvaging your
credit is the main advantage to
doing a short sale. Always seek
legal and tax advice before
making any decision regarding a
short sale. Always consult an
experienced Realtor when
thinking of buying or selling a
short sale property.
About The Author
Scott Berry is the Broker for
Sand Castle Realty Group, Inc.
headquartered in Naples Florida
with real estate operations
throughout the State of
Florida. Mr. Berry has
tremendous experience in the
Real Estate industry in
Southwest Florida, and he has
perfected the 100% Commission
Realtor Model. All Sand Castle
Realty Group, Inc. Realtors
receive 100% of their commission
for $100 / month which had
helped make them Southwest
Florida’s Fastest Growing Real
Estate Firm. For Real Estate
Career Information visit
www.SandCareers.com .
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